1 January 2018

Zimbabwe: Ariston Posts Impressive Results

Agri-concern, Ariston Holdings Limited's revenue for the year ending September 30, 2017 rose 19 percent to $11 million on the back of increased volumes across board.

Gross margins for the year improved to 31 percent from 18 percent in the prior year, while operating expenses declined to $4,3 million, from $4,4 resulting in a 2 percent saving. Ariston narrowed loss for the year to $1,761 million from $2,376 million that was incurred in the prior year.

Southdown Estates has remained the group's major contributor to both revenue and profitability. Its revenue at $9 million was 80 percent of group's total revenue. Claremont Estates and Kent Estates each contributed $1 million and $0,9 million in revenues, both marginally lower than last year's.

Stone fruit production volumes increased to 943 tonnes from 776 tonnes as the young orchards yields improved in line with their maturity profiles. Chairman Alexander Jongwe, said the group will maintain the growth trajectory in the coming seasons with exports market targeted in the year 2018 for the fruit. This is expected to further boost the group's earnings.

Production volumes for pome fruit also improved to 1 133 tonnes from 1 032 tonnes and anticipated to grow further in ensuing seasons while avocado production in 2017 was also in line production volumes achieved in the prior year.

Potato production rose 14 percent to 1 103 tonnes although average selling price was 10 percent below prior year. Banana production for the period under review increased 6 percent to 790 tonnes, while the average selling price remained in line with prior year.

Poultry production was 18 percent below prior year due to the challenges in the supply of day old chicks. The country was hit by avian influenza virus, which affected supply of day old chicks that subsequently hurt poultry firms.

However, post year end, supply had improved. Tea production volumes in the year increased 16 percent on the back of improvements in irrigation water availability. Export tea sales also rose 17 percent to 1 367 tonnes, while local sales were 16 percent above prior year at 1 022 tonnes. The international tea prices firmed resulting in average export tea selling price achieved by the group improving by 12 percent.

Also on the upside was the macadamia production that marginally improved to 1 324 tonnes from 1 317 tonnes while quality significantly improved resulting in a 42 percent upsurge in average selling price. Demand for macadamia nuts remained firm, while product quality was achieved due to the new macadamia drying facility which was launched in December 2016.

Management is upbeat of improved earnings in the financial year 2018 buoyed by improved production in macadamia, pome and stone fruits. Additionally, early production volumes of tea are showing that current harvest is approximately 40 percent above prior year for the same comparative period.

"Early indications on pricing are showing that prices will remain firm on tea and macadamia, which are significant revenue contributors. The group will continue to stringently manage its cash flows as it completes its turnaround and re-organisation of its statement of financial position. A lot of progress was made in 2017 and this will be continued in 2018," said Mr Jongwe.

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